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Katchum
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Albert Sung is the author of Correlation Economics, monitoring breaking economic news on a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at Ashland, a... More
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Correlation Economics
  • Red Alert In Gold Lease Rates 7 comments
    May 10, 2013 4:13 AM | about stocks: GLD

    I have become very bullish lately on silver and was already bullish on gold.

    But the following chart makes me ultimately bullish. We see the biggest increase in gold lease rates as of yesterday and we have seen this before. In 2008, the gold lease rates started to spike upwards, which meant gold was in short supply. It also meant that the "interest" to hold gold was going up, just like the "interest" on your cash is going up.

    This ultimately means that the world is valuing gold at a higher interest rate and the central banks are demanding their gold back from the bullion banks.

    We are in for a huge upside move if you ask me.

    (click to enlarge)

    Disclosure: I am long AGQ.

    Stocks: GLD
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Comments (7)
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  • phdinsuntanning
    , contributor
    Comments (1194) | Send Message
     
    I ask you if you remember what happened to gold price the year after 2008...
    10 May 2013, 06:32 AM Reply Like
  • Katchum
    , contributor
    Comments (528) | Send Message
     
    Author’s reply » Well, it bottomed out.
    10 May 2013, 07:11 AM Reply Like
  • phdinsuntanning
    , contributor
    Comments (1194) | Send Message
     
    so, there we go again, but after the bottom the sky can be the limit as in 1933-1936 (up 500% measured at Homestake stock price, or Barrick Inc. now). But is 1928 in the stock market now. Probably we will go directly to 1933 this year with all this digital liquidity...
    15 May 2013, 01:10 PM Reply Like
  • Katchum
    , contributor
    Comments (528) | Send Message
     
    Author’s reply » I find it amazing that with GDP contracting in Europe, the stocks keep going higher in Europe. Declining oil and commodities and baltic dry index, still the stocks go higher. Stock valuations are now almost at bubble territory of 2007 and not much off the 2000 NASDAQ bubble.
    15 May 2013, 02:41 PM Reply Like
  • phdinsuntanning
    , contributor
    Comments (1194) | Send Message
     
    there are two prices now in every market: the digital price and the physical price, with the physical price = to the digital price + the spread, take copper prices, is LME+$180, aluminum LME+300, money in southern Europe LME+the sovereign spread. And then you have spread between LME and COMEX, no such a thing ad the "market price", same coming for precious I guess.
    16 May 2013, 10:40 AM Reply Like
  • Katchum
    , contributor
    Comments (528) | Send Message
     
    Author’s reply » You talking about for example the 25% premium in silver? I'm new to this spread thing, never heard about it.
    18 May 2013, 07:02 AM Reply Like
  • AlphaDoggie
    , contributor
    Comments (7) | Send Message
     
    Harvey Organ monitors Gold Forward (GOFO) rates daily in his blog for those interested:

     

    http://bit.ly/1dn6nnU

     

    Also note Russia hoarding internally produced gold in 2013:

     

    http://bit.ly/1dn6nnV
    31 Dec 2013, 07:41 AM Reply Like
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